A-Level Edexcel Business Global Markets & Business Expansion: Assess whether legal controls ar

Question

Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil.

Legal controls include the use of legislation and government policies. Multinationals can also be controlled using: political influence; pressure groups; social media.

The Brazilian government has used legal controls in its control of advertising and selling sugary and fatty foods. This could limit the ability of multinationals such as KFC and Pepsi from increasing sales, or it might force them to change the contents of their products and the way in which they are marketed. Often legal controls are exploited and easily enforced in order to make the required changes rather than having to rely on the behaviours of other stakeholders.

Successful actions can be enforced and in some cases the resources available to the multinational can be greater than the pressure groups that maintain the strong brand image of KFC or Pepsi.

Potential counterbalance

Legal controls only work if they are enforced. An economy such as Brazil's may not have the resources to monitor and enforce laws on ingredients in foods may not lead to effective legislation, for example reports, such as Supply Chain, criticize working conditions in the Brazilian orange juice industry. The report alleged high risks tied to working with pesticides and that factories may be operating illegally.

Potential judgement

Multinationals operate in many markets, and although Brazil is large and growing, these businesses can pull out and concentrate on other markets. This could disappoint consumers and prevent them consuming the brands many people see as aspirational. This may mean that any control method will not affect the actions of multinationals.

Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1

Worked Solution & Example Answer:Assess whether legal controls are the most effective way of controlling the actions of multinational companies in countries, such as Brazil - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1

Legal controls include the use of legislation and government policies.

Potential counterbalance

Potential judgement

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